Orbitz to segment consumers by operating system!

Update: It seems the ZDNet article was a bit off (and I didn’t do as much research as I should have). Here’s a Wall Street Journal article which explains that what they’re changing is the order in which they display hotels based on price.

Via ZDNet, Orbitz has said they’ll segment consumers by operating system, and will charge Mac users $20 to $30 a night more per hotel room. Their reasoning is that Mac users are willing to pay a premium for their electronics, and are therefore also (apparently) willing to pay a premium for hotels.

A few thoughts:

  • Orbitz is pretty dumb for being so upfront about this. While it’s an interesting business decision it’s not something I’d brag about in their shoes.
  • I think their assumption that Mac users are willing to pay more for hotels is a bit off. They’re willing to pay a premium for Apple products, but I think the assumption that they’ll blindly be overcharged is off. If anything they’ll avoid Orbitz altogether.
  • Orbitz isn’t actually selling their own branded product, but rather pulling from multiple sources. I suspect most consumers search on more than just Orbitz when planning their travel.
  • While I think this is a stupid business decision, I’m not actually convinced it’s unfair/wrong. At the end of the day airlines and hotels are trying to segment consumers based on their willingness to pay, and this is just an extension of that. I don’t see it as being all that different than advance purchase requirements, day of week restrictions, etc. So in other words even as a Mac user I have no ill till towards Orbitz because of this. I just think it’ll backfire.

What do you guys think?

(Tip of the hat to Andrei)

Comments

  1. You missed the point. They’re showing the same price for the same hotel. They’re just changing the default presentation order to put nicer/more expensive hotels at the top for Mac users since they’re more likely to book them.

  2. What a fuss about nothing. Orbitz are trying to tune their results to their audience. Hats off, good job, smart thinking.

    If I turn up in a Bentley, offer me a suite. If I turn up in a Chevvy, offer me a discount single bed.

    The problem is?

  3. Op totally missed their point. Just showing higher rooms/hotels first on Macs. Price is identical across OSs.

  4. To me, this seems nothing different than charging different amounts via zip codes (Amazon did it, most catalogs “back in the day” had multiple copies). As consumers give more and more of their data and information to companies, we can expect companies to get better and better at targeting and charging different amounts for different products to different customers.

  5. @Mark, I’ve seen a lot of people on twitter make that mistake today. I don’t know if it’s a mistake in comprehension or if they’re just spinning misleading headlines for effect.

  6. @Lucky: You think you could FIX the title of this post instead of leaving the completely misunderstood and unresearched version intact?

  7. Thanks for the fix Lucky!

    Anyone can make a mistake, but it’s important to see the record set straight when the original assumptions are discovered to be false.

    -Dax

  8. So I wonder what order I’ll get when I use XP/7 that’s running in a vm inside of Vmware Fusion…or lets mangle the http headers for different results too!

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